Brooklyn Heights haircut spotlights buyers’ market for multifamily

Benchmark sold 25 Monroe for 13 percent below 2015 price

Benchmark Real Estate Group's Aaron Feldman and Jordan Vogel; Ben-Josef Group Holdings’ Aviv Laurence; 25 Monroe Place (Getty, Google Maps, Linkedin)
Benchmark Real Estate Group's Aaron Feldman and Jordan Vogel; Ben-Josef Group Holdings’ Aviv Laurence; 25 Monroe Place (Getty, Google Maps, Linkedin)

A Brooklyn Heights apartment building with condo finishes and one-bedrooms fetching well above the borough’s median rent sold for $43.5 million last month, property records show.

The price for 25 Monroe Place clocks in 13 percent below the $50 million seller Benchmark Real Estate Group paid in 2015 and leagues less than the $70 million it hoped to fetch when it marketed the deal in 2019.

Benchmark took the haircut — or trim — as a matter of practicality, according to a source familiar with the transaction. 

The deal was held in a fund nearing the end of its life next June. Benchmark’s Aaron Feldman and Jordan Vogel were working to sell before the terminus and head off a loan maturity in early 2025, the source said. 

Buyer Ben-Josef Group’s offer was a good enough price given the constraints. 

Benchmark declined to comment and Ben-Josef Group’s CEO Aviv Laurence did not return a request for comment.

The trade spotlights a shrinking bid-ask gap for multifamily sales that is overwhelmingly working in buyers’ favor. 

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Loan maturities like Benchmark’s are forcing owners to come down on asking prices or face a thorny refinancing. More are choosing the former. Though interest rates seem to be headed south, uncertainty around the Fed’s next move still clouds the outlook for financing costs.

And owners with 10-year multifamily loans coming due face a double whammy. Not only are interest rates higher, but those investors bought at a market peak, meaning there’s little chance they escape a loss, let alone bag a profit. 

Benchmark, for example, paid $823 per square foot for 25 Monroe in 2015. Free-market Brooklyn deals in the fourth quarter were fetching $555 per square foot on average, according to a report by brokerage Ariel Property Advisors. 

By that yardstick, the $716 per square foot Benchmark banked is a home run. 

As for the $70 million Benchmark hoped to get in 2019 — another hot time for multifamily — the source familiar said the property was never worth that much. 

The asking price was wishful thinking. 

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Benchmark Real Estate Group's Aaron Feldman (left) and Jordan Vogel (right) with 25 Monroe Place in Brooklyn (Credit: LinkedIn)
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